Unravelling The Mystery Of Your Credit Score

“Credit score”: two words you probably hear a lot of, and perhaps they are weighing on your mind, what with a variety of applications dependent on the state of them. If you’re feeling a little bewildered, we’ve comprised a basic outline of the “to knows” when it comes to your credit score.

Unable to meet your monthly repayments, but want to get back on track and improve your credit score? Call us today on 0800 048 1764.
Unable to meet your monthly repayments, but want to get back on track and improve your credit score? Call us today on 0800 048 1764.

So, what is a credit score?

When you apply for credit, the lender’s responsibility is to ensure that you can comfortably manage your borrowing. To be sure you can afford your application for credit, a credit score is calculated to reflect your financial history, in terms of credit repayment and financial commitments, to measure the likelihood that you will be able to make repayments to the lender.

Which information is included on your credit score?

  • Electoral roll information
  • Credit account information
  • County court judgments or decrees – these are held on your credit report for six years from the date of the judgment
  • Previous credit checks – held for one year
  • Shared financial commitments

Which information is not included on your credit score?

  • Mortgage repossessions
  • Loan or credit card accounts that were opened before 1994
  • Student loans
  • Savings accounts, fines, child support, medical history, criminal records

What credit score do I need to apply to a lender?

Generally speaking, the higher your credit score, the better – in terms of increasing the chance of a successful application and as an indication of your general financial health.

However, different lenders have different thresholds for accepting an application, and so there is no blanket minimum credit score needed to apply.

How can I boost my credit score?

  • Open new accounts, for example a store card, but  make sure you are able to pay them back responsibly to show lenders you are capable of managing credit
  • Register on the electoral roll at your current address with your local council
  • Make all of your payments on time and in full
  • Close any accounts that are not in use
  • Correct any incorrect information on your credit report

What if I’m unable to make my current repayments?

If you feel that you are unable to meet your monthly repayments, but want to get back on track call one of our advisers today on 0800 048 1764 to discuss organising your debts into regular affordable payments to your creditors.

Entering into a debt management plan means the terms of your current credit agreement are broken, which technically results in defaults that could appear on your credit report.
However, if you are concerned that your debts are affecting your credit rating, the worst thing you can do is ignore them. Building a record of regular, affordable payments towards your debts through a debt management plan is more favourable than avoiding payment, incurring interest and charges, or eventually entering into insolvency.

Source: Equifax, Experian